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Post by Merge on Feb 24, 2021 12:28:43 GMT
So the rest of the country should spend billions to help Texas when things like this happen, so you can have lower utility costs than the rest of us? And FYI, we don’t pay $600 a month for electricity any time of the year. I guess socialism is okay when they need help? If I remember correctly, Texas doesn't have state income tax, right? How is Texas going to help out when they don't have income? We don’t have state income tax. We do have fairly high property tax and sales tax to offset that. We do also pay federal income tax, obviously. I don’t know what the answer is here, but I do think my state needs to get its act together in this issue before looking for federal assistance. Requiring energy producers to winterize their equipment is not unreasonable. Part of our problem is that our “pro-business” culture often means “do what you want to make a profit and don’t factor in the potential human cost unless you feel like it.” I think any potential federal aid should come with the stipulation that Texas put measures in place to prevent this from happening again.
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Post by Megan on Feb 24, 2021 13:30:33 GMT
I can completely see some people saying it's on Texans since they enjoyed the low rates for years and the pricing system has been a gamble.
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Post by Deleted on Feb 24, 2021 13:38:54 GMT
I can completely see some people saying it's on Texans since they enjoyed the low rates for years and the pricing system has been a gamble. Yep. "Heads I win. Tails you lose."
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Post by Merge on Feb 24, 2021 14:13:17 GMT
I can completely see some people saying it's on Texans since they enjoyed the low rates for years and the pricing system has been a gamble. I hear you. The problem, of course, is that regular Texans have had no real say in this, and many of us have voted for Democrats who have introduced bills (all killed by Republicans) over the last 20 years to require more stringent regulation of our power producers. And there are lots of Texans who haven't exactly been laughing their way to the bank because of the "low rates" they've enjoyed (as others have pointed, out, our rates for retail electricity are not that low). I think it's more accurate to say that power producers and retail providers have enjoyed a relatively low cost of operation and thus increased profit on the backs of regular Texans trying to cool and heat their homes.
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Post by iamkristinl16 on Feb 24, 2021 14:20:47 GMT
I can completely see some people saying it's on Texans since they enjoyed the low rates for years and the pricing system has been a gamble. Especially with how elected officials from Texas (and other states) have acted about sending aid to blue states. And the whole “pull yourselves up by your bootstraps” mentality that seems to be prevalent. In my idea world, the aid money would also go directly to the people who need it. Not to pay for those upgrades. My stepbrothers and their families live in Cedar Rapids, IA and their area was hit very hard by the derecho last summer. I think the state did get some aid but not what they asked for or needed, but there was also not as much media coverage. I’m always curious where the aid money goes. My relatives didn’t personally get any help with costs to take away the trees that fell on their houses or yards. But I know that many people were houses I hotels and the city took away the trees that were left on the side of the road. Maybe the aid money helped put for that?
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Post by Mel on Feb 24, 2021 14:24:20 GMT
I’m curious how the idea of keeping their electricity separate was sold to the people. Were they aware that this could happen (as Rick Perry implied when he said that Texans should be willing to sacrifice to keep the regulators out?) I hope that people realize that regulations are there for a reason and that big business can’t be counted in to do the right thing. And neither can Some politicians. I keep thinking(wondering) that too. I mean, why is that even a thing?? You would think that being regulated wouldn't be an option. Especially in today's world, with global warming, etc. ::::scratching my head::::
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Post by Darcy Collins on Feb 24, 2021 14:28:28 GMT
I can completely see some people saying it's on Texans since they enjoyed the low rates for years and the pricing system has been a gamble. I hear you. The problem, of course, is that regular Texans have had no real say in this, and many of us have voted for Democrats who have introduced bills (all killed by Republicans) over the last 20 years to require more stringent regulation of our power producers. And there are lots of Texans who haven't exactly been laughing their way to the bank because of the "low rates" they've enjoyed (as others have pointed, out, our rates for retail electricity are not that low). I think it's more accurate to say that power producers and retail providers have enjoyed a relatively low cost of operation and thus increased profit on the backs of regular Texans trying to cool and heat their homes. I truly feel for the people of Texas - but absolutely agree with your previous post that the Fed has to demand something in return for federal dollars about structural changes. There are still way, way too many people in Texas who want the aid and the ability to continue their fu to reasonable regulations that every other state has implemented and that every other citizen pays for directly with their utility bills. At point there was talk of FEMA money going to pay the insane electric bills to those on wholesale plans. Hell to the no. The power companies can eat it considering how thoroughly and colossally they failed their customers.
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peppermintpatty
Pearl Clutcher
Refupea #1345
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Jun 26, 2014 17:47:08 GMT
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Post by peppermintpatty on Feb 24, 2021 14:30:49 GMT
I feel a need to explore this land of Bumblefart. Isn't it in Animal Crossing?
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Post by Deleted on Feb 24, 2021 14:30:49 GMT
Exposing retail customers to $9/kwh prices was always going to be a disaster.
When wholesale rates are low (which is most of the time) the customers make out like bandits and feel really smart.
When wholesale rates are high - in an emergency - customers will whine and complain and be unable to pay their bills anyway.
So, what's the point again of exposing them to wholesale prices?
The idea is supposed to be, when power prices go up, they'll conserve energy. But the problem is MOST retail customers are NOT on wholeale rates. They're on fixed price (higher than NORMAL wholesale) rates. So they will keep using and keeping power prices high. Meanwhile those who ARE ON wholesale rates can't cut usage to zero because IT'S ELECTRICITY - which is necessary for many parts of life.
Bad idea all around. Should never have been allowed by the PUC.
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Post by Merge on Feb 24, 2021 14:40:27 GMT
I hear you. The problem, of course, is that regular Texans have had no real say in this, and many of us have voted for Democrats who have introduced bills (all killed by Republicans) over the last 20 years to require more stringent regulation of our power producers. And there are lots of Texans who haven't exactly been laughing their way to the bank because of the "low rates" they've enjoyed (as others have pointed, out, our rates for retail electricity are not that low). I think it's more accurate to say that power producers and retail providers have enjoyed a relatively low cost of operation and thus increased profit on the backs of regular Texans trying to cool and heat their homes. I truly feel for the people of Texas - but absolutely agree with your previous post that the Fed has to demand something in return for federal dollars about structural changes. There are still way, way too many people in Texas who want the aid and the ability to continue their fu to reasonable regulations that every other state has implemented and that every other citizen pays for directly with their utility bills. At point there was talk of FEMA money going to pay the insane electric bills to those on wholesale plans. Hell to the no. The power companies can eat it considering how thoroughly and colossally they failed their customers. Oh, totally agree with all of that.
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Post by Deleted on Feb 24, 2021 14:42:16 GMT
Here come the FEDS to the rescue. It's not SOSHULIZM when it helps ME! "Wholesale rate-based plans “can be tantalizing to consumers when the sales emphasis is placed on the possibility of very low rates during times of pleasant weather,” he said. “But they can be financially devastating when harsh hot or cold weather creates scarcity in the wholesale energy market.” As a rule, the PUC encourages fixed-rate plans, he said. Those plans “may not offer the super-low pleasant-weather prices that are so attractive with those other plans,” he said, “but they moderate risk throughout all seasons.”... While the PUC cannot offer financial relief for the consumers hit with astronomical bills, Texans can check with the Texas Department of Housing and Community Affairs, which recently received a federal block grant that includes some relief funding for utility bills." www.dallasnews.com/business/2021/02/20/griddy-customers-face-5000-bills-for-5-freezing-days-in-texas/So instead of that money going to help the poorest - it will help many who gambled on wholesale power prices and lost - while heating their large homes. While gas and power producers made bank and can now afford even more toys and goodies on the backs of the low- and middle-income worker. Sweet!
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Post by ntsf on Feb 24, 2021 15:27:02 GMT
there is an article out this morning showing that texas citizens paid like $28 billion more for power than if they had regulated in the usual manner. false savings article in wall street journal..
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Post by Deleted on Feb 24, 2021 15:29:54 GMT
"But for oil and gas producers that have managed to keep production going, this is proving to be a big payday. Jerry Jones, the billionaire owner of the Dallas Cowboys, appears to be one of the beneficiaries. Comstock Resources Inc., a shale driller that operates in Texas and Louisiana, told investors on an earnings call this week that the surge in natural gas prices was providing it with a major — albeit almost certainly temporary — financial boost. The company is publicly traded but Jones holds a majority of the shares. "Obviously, this week is like hitting the jackpot," President and Chief Financial Officer Roland Burns said Wednesday. " www.npr.org/sections/live-updates-winter-storms-2021/2021/02/18/969074414/jerry-jones-company-hits-jackpot-as-harsh-storms-send-natural-gas-prices-surgingBillionaires gonna billionaire.
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Post by hop2 on Feb 24, 2021 21:01:14 GMT
Exposing retail customers to $9/kwh prices was always going to be a disaster. When wholesale rates are low (which is most of the time) the customers make out like bandits and feel really smart. When wholesale rates are high - in an emergency - customers will whine and complain and be unable to pay their bills anyway. So, what's the point again of exposing them to wholesale prices? The idea is supposed to be, when power prices go up, they'll conserve energy. But the problem is MOST retail customers are NOT on wholeale rates. They're on fixed price (higher than NORMAL wholesale) rates. So they will keep using and keeping power prices high. Meanwhile those who ARE ON wholesale rates can't cut usage to zero because IT'S ELECTRICITY - which is necessary for many parts of life. Bad idea all around. Should never have been allowed by the PUC. Is that Griddy or Greedy?
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twinsmomfla99
Pearl Clutcher
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Post by twinsmomfla99 on Feb 24, 2021 22:08:12 GMT
Exposing retail customers to $9/kwh prices was always going to be a disaster. When wholesale rates are low (which is most of the time) the customers make out like bandits and feel really smart. When wholesale rates are high - in an emergency - customers will whine and complain and be unable to pay their bills anyway. So, what's the point again of exposing them to wholesale prices? The idea is supposed to be, when power prices go up, they'll conserve energy. But the problem is MOST retail customers are NOT on wholeale rates. They're on fixed price (higher than NORMAL wholesale) rates. So they will keep using and keeping power prices high. Meanwhile those who ARE ON wholesale rates can't cut usage to zero because IT'S ELECTRICITY - which is necessary for many parts of life. Bad idea all around. Should never have been allowed by the PUC. Is that Griddy or Greedy? I'm not sure Griddy is the biggest part of the problem or that it should bear the brunt of the blame for this fiasco. IIRC from other reports I've seen (and if someone know otherwise, please correct me), Griddy makes its money from a monthly "membership" fee that allows customers to access electricity at the wholesale rate. Griddy does not make more money just because prices go up, nor does it make less when prices go down. It is a set fee per month. The increase in prices goes directly to the electric wholesaler providing the electricity; they are the ones making the insane amount of money. In fact, Griddy saw this coming, and it advised its customers to change to fixed rate plans instead of the Griddy wholesale plans. However, the fixed rate plans were not accepting new customers as the freeze began. Why? Because the fixed rate plans need approval to increase the rates they charge customers, but they still have to pay the wholesale rate for the electricity from the wholesalers. Allowing customers to switch to the fixed plan when prices were increasing at astronomical rate would just transfer the high cost of electricity from the Griddy customer to the fixed rate plan. This description may be an oversimplification. There are generally a lot of variables in these kinds of situations, but I think this is a good recap of what I was reading this week. I think a good analogy for the position the Griddy customers were in would be health insurance and pre-existing conditions before ACA. If you had no insurance and were diagnosed with cancer, you couldn't sign up for health insurance after the fact and transfer the cost of your treatments to the new insurance company. The financial model for insurance assumed that the premiums you paid during your healthy years would make up for the claims you made in your unhealthy years (along with all the payments made by customers who never made any claims at all), and most insurance companies were subject to rules that required them to reserve a certain portion of those premiums for future claims. With the standard rate electric plans, you pay more than the typical wholesale rate (with an overall cap approved by the government which prevents payments from going above a certain amount). The difference between the wholesale rate and the rate billed to customers provides a healthy profit to the electric company, and they should be reserving some of that to hedge against emergencies when wholesale prices increase to an amount that exceeds the cap. It is understandable why they did not want to accept last minute switches from Griddy customers who had never paid the billing rate but suddenly want to take advantage of the situation to avoid the skyrocketing wholesale rate. And honestly, I'm not sure why this is such a surprise. There were huge spikes in energy rates for Griddy customers in August 2019, although not as high as during the current freeze. However, that August 2019 event should have been a huge red flag to anyone hoping to save money through Griddy. The linked article seems to support the statements I made above regarding how Griddy makes its money.
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Post by Deleted on Feb 24, 2021 22:44:58 GMT
The linked article seems to support the statements I made above regarding how Griddy makes its money. Griddy makes its money different ways depending on which rate schedule their customers choose. But, yes, for the wholesale plan, they pass through the wholesale rate that they're paying to their customers. The reason I harp on them is because they sold a product that is far too risky for their customers. Unhedged floating prices are dangerous for anyone - let alone normal folks who don't understand the possible downside/costs during emergencies - hence the $5000 to $17000 bills. PUCT should not have let Griddy offer that plan and Griddy should not have offered it. It's all fine when it's all fine, but when abnormal conditions arise, it's a nightmare and customers will likely walk away w/o paying one way or another - either thru some relief by the legislature or by just closing bank/credit card accounts so Griddy can't access the payment stream.
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Post by Merge on Feb 24, 2021 22:54:58 GMT
The linked article seems to support the statements I made above regarding how Griddy makes its money. Griddy makes its money different ways depending on which rate schedule their customers choose. But, yes, for the wholesale plan, they pass through the wholesale rate that they're paying to their customers. The reason I harp on them is because they sold a product that is far too risky for their customers. Unhedged floating prices are dangerous for anyone - let alone normal folks who don't understand the possible downside/costs during emergencies - hence the $5000 to $17000 bills. PUCT should not have let Griddy offer that plan and Griddy should not have offered it. It's all fine when it's all fine, but when abnormal conditions arise, it's a nightmare and customers will likely walk away w/o paying one way or another - either thru some relief by the legislature or by just closing bank/credit card accounts so Griddy can't access the payment stream. What I don’t understand is why PUC gets to have an emergency meeting the night before the storm hits to jack up prices to these astronomical rates. I understand supply and demand, but demand for energy was not going to be reduced in this case - people needed their power on. Does it cost more for the producers to make power in extreme conditions? The cynic in me feels that the system is set up to gouge customers who are relying on a public utility to protect their lives and property.
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Post by Darcy Collins on Feb 24, 2021 23:09:04 GMT
Griddy makes its money different ways depending on which rate schedule their customers choose. But, yes, for the wholesale plan, they pass through the wholesale rate that they're paying to their customers. The reason I harp on them is because they sold a product that is far too risky for their customers. Unhedged floating prices are dangerous for anyone - let alone normal folks who don't understand the possible downside/costs during emergencies - hence the $5000 to $17000 bills. PUCT should not have let Griddy offer that plan and Griddy should not have offered it. It's all fine when it's all fine, but when abnormal conditions arise, it's a nightmare and customers will likely walk away w/o paying one way or another - either thru some relief by the legislature or by just closing bank/credit card accounts so Griddy can't access the payment stream. What I don’t understand is why PUC gets to have an emergency meeting the night before the storm hits to jack up prices to these astronomical rates. I understand supply and demand, but demand for energy was not going to be reduced in this case - people needed their power on. Does it cost more for the producers to make power in extreme conditions? The cynic in me feels that the system is set up to gouge customers who are relying on a public utility to protect their lives and property. So in THEORY - it's two-fold - to encourage any and all generators to do anything possible to get back online to capture the extreme scarcity pricing and to punish generators who went off line and now have to buy wholesale for their customers (based on the extreme outages by customers not sure how many generators were out there buying. This is their explanation: www.puc.texas.gov/consumer/facts/factsheets/elecfacts/WinterStormPriceExplainer-FIN.pdfNow in reality, there's some debate on whether they left these prices too long and it's completely counter intuitive and bullshit to have FEMA grants going to pay for these bizarre regulation in midst of deregulation bullshit.
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Post by Deleted on Feb 25, 2021 0:17:15 GMT
Does it cost more for the producers to make power in extreme conditions? Yes. When gas prices shoot up (which they did) - natural gas generation shoots up too. What I don’t understand is why PUC gets to have an emergency meeting the night before the storm hits to jack up prices to these astronomical rates. Because the underlying nat gas prices were going through the roof. So generators weren't offering generation because they'd be getting back less in wholesale power prices (at the lower cap) than it cost them to generate that power using their generators' heat rate curves * the price of gas at the lower cap. There was about 60,000 MW of gas in the plan for these crucial days. But they lost about 28,000 of it - for various reasons - some due to physics, some due to fuel issues, but some due to the generation being out of the money. So ERCOT had to raise the cap so that the generation could come into the market and be paid higher prices since they were getting charged higher prices by the gas generators/transmission companies.
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Post by Deleted on Feb 25, 2021 0:31:22 GMT
Merge - here's more. It's multi-layered and multi-faceted. But a key factor IS ERCOT's unwillingess to MANDATE certain criteria prior to interconnection to its grid: "Ercot’s authority is somewhat limited. In 2011, the last time freezing weather caused rolling outages, it released best practices for power generators to follow, but it couldn’t require anything, said Adrian Shelley, Texas office director of Public Citizen, an advocacy group. Federal energy regulators also issued a 357-page report that recommended generators winterize their equipment, including insulating pipes. “The financial incentive isn’t there to harden that infrastructure,” he added. “From a generator perspective, the only incentive is to bring energy to market as cheaply as possible.” Power prices spiked on several days to the price cap in Texas — a staggering $9,000 a megawatt-hour. A 100-megawatt wind farm in the state that might have normally made almost $40,000 over a two-day period in February could reap more than $9.5 million on Monday and Tuesday alone, Nicholas Steckler, a power-markets analyst at BloombergNEF, said. On Monday, electricity sales likely totaled $10 billion, according to Wood Mackenzie. While some pointed to wind power as a culprit, as of early Tuesday wind shutdowns accounted for 3.6 to 4.5 gigawatts—or less than 13%—of the 30 to 35 gigawatts of total outages, Ercot’s Woodfin said. Gas produced 35% of the power in January.... By Friday, temperatures had dropped to 24 degrees in Dallas. Texans were told to start conserving energy. Physical gas prices soared to more than $500 in Oklahoma from less than $4 at the start of the week. As of Tuesday, they had doubled to roughly $1,000 per million British thermal units. Texas Governor Greg Abbott asked a major gas exporter to limit their intake." time.com/5940220/texas-blackouts-explained/Here's the good news. Though ERCOT is non-FERC jurisdictional as a market operator (except in really insignificant ways), the TRE is NOT! That's the reliability arm of the "grid". It is overseen by NERC and ultimately be FERC. TRE (and NERC and FERC) CAN force more mandates for interconnection - and they better jump on it this time. "Although FERC’s jurisdiction over wholesale power sales and transmission does not reach ERCOT markets, its reliability jurisdiction does apply in ERCOT. After the 2011 cold weather event, referenced below, FERC initiated a broad inquiry that resulted in a joint report with the North American Electric Reliability Corporation (“NERC”). On Tuesday, February 16, 2021, FERC and NERC announced their intentions to proceed with a joint inquiry. Both agencies released statements providing that they will “open a joint inquiry into the operations of the bulk-power system during the extreme winter weather conditions currently being experienced by the Midwest and South central states.” The agencies stated that the inquiry will begin in “the days ahead” and will consist of a collaboration between federal agencies, states, and regional utilities to identify problems with the bulk-power system and craft solutions to those problems." www.natlawreview.com/article/regulators-to-review-market-design-and-reliability-following-2021-polar-vortex
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Post by Merge on Feb 25, 2021 0:31:32 GMT
Does it cost more for the producers to make power in extreme conditions? Yes. When gas prices shoot up (which they did) - natural gas generation shoots up too. What I don’t understand is why PUC gets to have an emergency meeting the night before the storm hits to jack up prices to these astronomical rates. Because the underlying nat gas prices were going through the roof. So generators weren't offering generation because they'd be getting back less in wholesale power prices (at the lower cap) than it cost them to generate that power using their generators' heat rate curves * the price of gas at the lower cap. There was about 60,000 MW of gas in the plan for these crucial days. But they lost about 28,000 of it - for various reasons - some due to physics, some due to fuel issues, but some due to the generation being out of the money. So ERCOT had to raise the cap so that the generation could come into the market and be paid higher prices since they were getting charged higher prices by the gas generators/transmission companies. Hmmmph. Add public utilities to the list of things I don’t think should be run at a profit. This is basic infrastructure these days.
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Post by Deleted on Feb 25, 2021 0:45:09 GMT
Add public utilities to the list of things I don’t think should be run at a profit. This is basic infrastructure these days. Yunh hunh! ERCOT is not-for-profit and some of the distribution utilities are municipalities. But MANY OF those underlying generation companies and many of the transmission companies and the retail energy providers and some of the distribution utilities are very much FOR PROFIT. And in these extreme periods they can make a KILLING. i.e., - Regulators examine Texas energy market after natural gas prices soared 10,000%www.cnn.com/2021/02/23/investing/texas-natural-gas-investigation-cftc/index.html
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Post by elaine on Feb 25, 2021 1:05:03 GMT
Yes. When gas prices shoot up (which they did) - natural gas generation shoots up too. Because the underlying nat gas prices were going through the roof. So generators weren't offering generation because they'd be getting back less in wholesale power prices (at the lower cap) than it cost them to generate that power using their generators' heat rate curves * the price of gas at the lower cap. There was about 60,000 MW of gas in the plan for these crucial days. But they lost about 28,000 of it - for various reasons - some due to physics, some due to fuel issues, but some due to the generation being out of the money. So ERCOT had to raise the cap so that the generation could come into the market and be paid higher prices since they were getting charged higher prices by the gas generators/transmission companies. Hmmmph. Add public utilities to the list of things I don’t think should be run at a profit. This is basic infrastructure these days. Yes. Which is why it is very appropriate for Texas to be connected to the national power grids and subject to federal regulations.
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